Roberts v. TriQuint Semiconductor, Inc.

Under the test articulated in The Bremen v. Zapata Off-Shore Co., forum selection bylaws are presumptively valid absent a showing that enforcing the bylaw would be unreasonable, that the bylaw was passed as a result of fraud, undue influence, or overweening bargaining power, or that enforcement of the bylaw would contravene public policy in jurisdiction in which the suit was brought. Under Oregon law and the standard announced in Reeves v. Chem. Industrial Co., forum selection bylaws are presumptively valid unless enforcement would be unfair or unreasonable.

TriQuint Semiconductor, Inc. and its directors (collectively TriQuint) petitioned the Supreme Court for an alternative writ of mandamus after the trial court denied TriQuint’s motion to dismiss on TriQuint’s claim that its bylaws establish Delaware as the exclusive forum for derivative shareholder suits. The Court recognized that under Delaware law, where TriQuit is incorporated, a corporation’s board of directors may unilaterally adopt a forum-selection bylaw regarding internal corporate governance, but it is possible that a forum-selection bylaw may be invalid as applied when it is used for improper purposes inconsistent with the board of director’s fiduciary duties. Delaware courts have said that courts, in determining whether a forum selection bylaw is valid, should look to the criteria laid out in The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S. Ct. 1907 (1972). In Bremen, the Supreme Court held that forum-selection bylaws are presumptively valid, absent a showing that enforcing the bylaw would be “unreasonable,” that the bylaw was passed as a result of “fraud, undue influence, or overweening bargaining power,” or that enforcement of the bylaw would contravene public policy in jurisdiction in which the suit was brought. Further, under the standard announced in Reeves v. Chem. Industrial Co., 262 Or. 95, 495 P.2d 729 (1972). forum selection bylaws are presumptively valid unless they are unfair or unreasonable. The Court found that TriQuit’s forum-selection bylaw was not a breach of the board of director’s fiduciary duties, and was a reasonable exercise of their power. Peremptory writ of mandamus to issue.